How Credit Reports Work

Your credit report affects all aspects of your financial activities. It has the ability to affect the job you get, the apartment you rent, and even the ability to open a bank account.Your credit report itself is a listing of your consumer debt and at times your mortgage. The two main credit reporting agencies are Trans Union and Equifax. Both agencies have a credit history file on anyone who has ever borrowed money. Reporting Your credit providers report at different times to the credit agencies. Lenders will report statement balances, credit limits, late payments, required payments and more. In addition to credit information, you will also find liens, judgements as well as your address and possibly your work history. If you find an error you have the right to dispute the error and to make a note on your report.Access You have the right to get a free copy of your credit report at any time. It is a good idea to check your credit every so often to make sure it is accurate. Anyone that accesses your credit report must have permission from you to do so. Credit Scores There are different types of credit scores based on the report the lender requests. Each has it’s unique way to calculate your score. A Beacon Score is the credit rating that most mortgage lenders use as an idea of your lending risk. The higher your credit score the better. The score that you have access to yourself for a small fee is your Risk Score which may be lower or higher than your Beacon Score. Score Factors The aspects that determine your score are the number of credit accounts, payment history, use of credit accounts, length that credit has been established, types of credit accounts and number of credit inquiries. Lender Use The lender and mortgage insurer will look at both your score and your credit history. If you have a high score but show recent late payments without a valid excuse and/or a limited amount of reporting the lender may consider you higher risk.Changes The good news is that your credit report is a working document. This means that you have the ability over time, to repair any damaged credit and increase your credit score. Check out our tips to improve your credit.

How Credit Reports Work

Your credit report affects all aspects of your financial activities. It has the ability to affect the job you get, the apartment you rent, and even the ability to open a bank account.Your credit report itself is a listing of your consumer debt and at times your mortgage. The two main credit reporting agencies are Trans Union and Equifax. Both agencies have a credit history file on anyone who has ever borrowed money. Reporting Your credit providers report at different times to the credit agencies. Lenders will report statement balances, credit limits, late payments, required payments and more. In addition to credit information, you will also find liens, judgements as well as your address and possibly your work history. If you find an error you have the right to dispute the error and to make a note on your report.Access You have the right to get a free copy of your credit report at any time. It is a good idea to check your credit every so often to make sure it is accurate. Anyone that accesses your credit report must have permission from you to do so. Credit Scores There are different types of credit scores based on the report the lender requests. Each has it’s unique way to calculate your score. A Beacon Score is the credit rating that most mortgage lenders use as an idea of your lending risk. The higher your credit score the better. The score that you have access to yourself for a small fee is your Risk Score which may be lower or higher than your Beacon Score. Score Factors The aspects that determine your score are the number of credit accounts, payment history, use of credit accounts, length that credit has been established, types of credit accounts and number of credit inquiries. Lender Use The lender and mortgage insurer will look at both your score and your credit history. If you have a high score but show recent late payments without a valid excuse and/or a limited amount of reporting the lender may consider you higher risk.Changes The good news is that your credit report is a working document. This means that you have the ability over time, to repair any damaged credit and increase your credit score. Check out our tips to improve your credit.